Business

By Caroline Valetkevitch

NEW YORK (Reuters) – U.S. stocks ended down sharply on Friday and posted their biggest weekly percentage declines since January as a steeper-than-expected rise in U.S. consumer prices in May fueled investor worries about more aggressive interest rate hikes by the Federal Reserve.

Tech and growth stocks, whose valuations rely more heavily on future cash flows, led the decline. Microsoft Corp and Apple Inc were among the biggest weights on the S&P 500 and Nasdaq.

Following the inflation report, benchmark 10-year U.S. Treasury yields reached 3.152%, the highest since May 9.

The U.S. Labor Department’s report showed the consumer price index (CPI) increased 1.0% last month after gaining 0.3% in April. Economists polled by Reuters had forecast the monthly CPI picking up 0.7%.

Year-on-year, CPI surged 8.6%, its biggest gain since 1981 and following an 8.3% jump in May.

Stocks have been volatile this year, and recent selling has largely been tied to uncertainty over the outlook for inflation and interest rates.

“Inflation this past month was certainly hotter than expected and a reminder that inflation will be with us for longer than we previously expected,” said Michael Sheldon, chief investment officer at RDM Financial Group at Hightower in Westport, Connecticut.

“But there are some signs within the economy that ultimately inflation should start to slow, and the Fed will likely do whatever it takes to keep raising rates and reduce inflation over the coming 12 to 18 months.”

According to preliminary data, the S&P 500 lost 117.05 points, or 2.91%, to end at 3,900.77 points, while the Nasdaq Composite lost 415.07 points, or 3.53%, to 11,339.16. The Dow Jones Industrial Average fell 882.47 points, or 2.73%, to 31,395.72.

  The inflation report was published ahead of an anticipated second 50 basis points rate hike from the Fed next Wednesday. A further half-percentage-point is priced in for July, with a strong chance of a similar move in September.

Netflix Inc slid after Goldman downgraded the streaming giant’s stock to “sell” from “neutral” due to a possibly weaker macro environment.

(Additional reporting by Devik Jain, Mehnaz Yasmin and Shreyashi Sanyal in Bengaluru; Editing by Arun Koyyur, Aditya Soni and Jonathan Oatis)

source

By Alison Frankel

(Reuters) – When plaintiffs lawyers in a derivative suit against Pinterest Inc board members asked for approval of their $5.4 million fee request last April, they told the judge they deserved twice their lodestar bills because they’d obtained significant corporate governance reforms that would make the company more diverse and inclusive, enhancing its long-term value for shareholders.

In an order issued on Thursday, U.S. District Judge William Alsup of San Francisco told the firms to prove it.

Alsup granted final approval to the settlement, in which Pinterest has agreed to commit $50 million to several diversity initiatives that vest the board with ultimate responsibility for both improving Pinterest’s corporate culture and assuring that the online image sharing service offers users more diverse responses to their search queries. The judge awarded Cohen Milstein Sellers & Toll, Renne Public Law Group, Bottini & Bottini, and Weiss Law $2.5 million in fees – about $200,000 less than their lodestar billings and less than half of what they requested.

But that award may go up if plaintiffs’ lawyers can show Alsup over the next two years that Pinterest is living up to the settlement agreement and that the reforms shareholders obtained in the derivative deal have resulted in an actual benefit to the company.

To that end, the approval order requires Cohen Milstein and the other firms to appoint lawyers “to enforce the settlement terms and police the corporation.” Alsup directed shareholders to file biannual reports documenting “how much progress has actually been made (or not made)” in attaining the goals laid out in the settlement agreement. If he likes what he sees over those two years, Alsup said, he will grant more fees to shareholder counsel.

I reached out to both plaintiffs’ lawyer Julie Reiser of Cohen Milstein and Pinterest counsel Boris Feldman of Freshfields Bruckhaus Deringer but neither offered comment on the extremely unusual approval order – the first, as far as I know, in which a judge has partially conditioned fees in a derivative case on the success of corporate governance reforms.

(Feldman said the same thing at a May 26 final approval hearing https://tmsnrt.rs/3xNQVBL, telling Alsup that he was not aware of any other derivative case in which the fee award was “contingent on future events.”)

Alsup has been leery of the value of the Pinterest governance reforms since shareholder lawyers first asked for preliminary approval of the settlement – billed as the first derivative deal to require a corporate board to oversee audits of the company’s diversity and inclusion efforts — last November. My Reuters colleague Jody Godoy covered the preliminary approval hearing Alsup oversaw last January, in which the judge said shareholder lawyers too often tout “cosmetic improvements” and then ride “into the sunset” without assuring that they’ve achieved any real change.

Alsup was particularly concerned in this case because Pinterest’s board had already adopted several policies intended to improve corporate culture before shareholders settled the derivative suit. The board brought in Wilmer Cutler Pickering Hale and Dorr to conduct an internal investigation in 2020, after high-ranking women at the company stepped forward with allegations of pervasive race and gender discrimination. Following a six-month probe, the company said it would (among other things) revamp training, set new diversity goals and partner with the NAACP to create an inclusion advisory council.

Shareholder lawyers persuaded the judge to grant preliminary approval in February, arguing that their proposed settlement added considerably to the board’s own initiatives by, for instance, requiring the company to invest $50 million in diversity programs and imposing oversight responsibility on the board itself. Plaintiffs lawyers sounded similar themes in April, when they moved for a $5.4 million fee award. That amount, they said, was only 10.75% of the $50 million Pinterest had pledged to spend on corporate governance.

At the final approval hearing last month, the judge made it clear that he would base fees on lodestar billings, not the $50 million budgeted for reforms.

“There’s no money changing hands here,” he told Reiser of Cohen Milstein. “That’s what concerns me. And they say they will allocate, in the future $50 million, over 10 years. We have no way of knowing whether that’s going to happen.”

Pinterest lawyer Feldman told Alsup that the company considered the shareholders’ fee request reasonable. Feldman also pushed back when the judge floated the idea of a 10-year monitoring program that would allow him to keep tabs on the company’s compliance.

That would be “inappropriate,” Feldman said. “You shouldn’t retain 10 years of jurisdiction over a consensual settlement between private parties with no — no one died here. No towns were burnt down,” he continued. “The court, respectfully, should not be our corporate overseer for the next 10 years.”

Alsup said at the conclusion of the May 26 hearing that he still had doubts about approving the settlement without a mechanism for him to evaluate the benefits of the governance reforms. “The easy thing to do would be to rubber-stamp this,” he said. “[But] I’ve seen too many derivative cases, and I know the abuse.” He advised the two sides to add a monitoring component to the settlement.

In a post-hearing brief, plaintiffs lawyers said they’d reached a deal with Pinterest to allow them to police the settlement for two years, with regular reports to the judge on the company’s progress.

Alsup groused in the final approval order that the settlement gave Pinterest 10 years to invest $50 million in diversity programs, so the two-year monitoring feature would leave the company “unpoliced” for eight years. He nonetheless approved the settlement.

Alsup is, by his own admission at the May 26 approval hearing, more of a stickler on shareholder settlements than most judges. It will be interesting to see if any other courts follow his lead on requiring proof that corporate reforms have accomplished something before rewarding plaintiffs lawyers for obtaining them.

source

By Mike Dolan

PARIS (Reuters) – The European Central Bank’s ‘whatever it takes’ commitment to bind the euro zone is wearing thin as it tries to ‘normalise’ monetary policy and give inflation hawks more say in how it goes about it.

Warning that inflation is unacceptably high and that it would remain above the 2% target over a three-year forecast horizon, the ECB on Thursday flagged a first interest rate rise in more than 10 years next month, after the end of new purchases on its long-running bond-buying programme from July 1.

Although ECB chief Christine Lagarde stressed that the central bank was ‘committed’ to avoiding so-called ‘fragmentation’ of borrowing costs between euro zone members as bond buying ends, financial markets were far from sure.

Many investors doubt Lagarde’s developing approach to ECB policymaking – which appears to give greater voice to national central banks and countries with a more hawkish monetary stance that those at the centre – will allow the same sort of open-ended commitment to rein in debt costs at the periphery as given by her predecessor Mario Draghi.

Draghi’s seminal ‘whatever it takes’ comment in a London speech in 2012 was credited with ending the existential two-year euro debt crisis back then. Now as Italian Prime Minister, he may have good reason to worry those words don’t appear to be resonating as much with markets 10 years on.

Italy’s government bonds, the second biggest euro government debt market by size and a bellwether for sentiment toward high-debt euro sovereigns at large, plunged after Thursday’s announcements as both Italian nominal yields and those relative to benchmark German equivalents ballooned.

As futures markets priced a whopping 1.2 percentage points of further ECB hikes between the pre-announced July rise and year-end, Italy’s 10-year bond yield rose as much as 20 basis points on the day to its highest level since 2018 at 3.715% and just a whisker from eight year-peaks.. Spanish, Portuguese and Greek yields all wobbled too.

As worrying, the risk premium on Italian 10-year bonds over Germany’s moved to 225 bps – its highest since the onset of a pandemic that forced multiple fiscal rescues and pushed Italy’s debt to a record 160% of gross domestic product.

FRIGHTENING FRAGMENTATION

Speaking at Amundi’s World Investment Forum in Paris as the ECB met, former International Monetary Fund chief economist Olivier Blanchard said he worried the ECB did not yet have the sort of tools that will convince investors fragmentation is manageable.

Blanchard reckoned that the sort of monetary tightening the ECB was likely to need to control inflation was less than was required by the U.S. Federal Reserve – as labour markets were much tighter in the United States and therefore ECB tightening shouldn’t in theory be a problem for debt sustainability.

But he said bond investors still needed to be convinced of that because an outsize rise of long-term borrowing costs could by itself change those sustainability metrics and create a “self fulfilling” problem the ECB would eventually need to address.

“My main worry about the ECB is that in order to convince investors that the spread will remain low you have to convince them you will do whatever it takes,” said Blanchard, now a senior fellow at Peterson Institute for International Economics.

“If investors believe you will put a bit in, but not enough, they will still demand a higher spread,” Blanchard said. “I’m worried at this stage that the ECB doesn’t have a process with which it can intervene sufficiently to address this and I suspect this is going to be an issue for the next year or two.”

As the ECB announced the end of its Asset Purchase Programme, introduced in 2014 to avert potential deflation, Lagarde insisted the central bank had the flexibility to deal with any fragmentation that followed.

“If it is necessary, as we have amply demonstrated in the past, we will deploy either existing adjusted instruments or new instruments that will be made available,” Lagarde told a news conference. “But we are committed – committed – to proper transmission of our monetary policy.”

But “proper” is a fuzzier concept when you are tightening underlying monetary policy – unlike the 2012-14 period when easier and easier policy jibed with the underlying deflation picture. Similarly, the objection in the ECB statement to “unwarranted” fragmentation remains ill-defined in many eyes.

What’s more, ECB sources told Reuters after the meeting that there was a large majority of policymakers against announcing a new fragmentation-fighting tool this week.

The prospect of using the proceeds of coupons and or maturing bonds bought through the separate Pandemic Emergency Purchase Programme (PEPP) in the event of any new stress also seems to be caveated by defining that stress as strictly pandemic-related – and not emanating from inflation-driven tightening per se.

All in, investment firms seem uncomfortable about the evolving consensus within the council if hawks are back at the top table and believe disagreement and hesitation could be costly.

“The central bank will hope that it will not need to construct another programme to support Italy,” said Hetal Mehta at Legal & General Investment Management. “Higher ECB interest rates and Italian borrowing costs call into question Italian debt sustainability.”

The author is editor-at-large for finance and markets at Reuters News. Any views expressed here are his own.

(by Mike Dolan, Twitter: @reutersMikeD. Charts by Marc Jones and Sujata Rao; Editing by Susan Fenton)

source

By Daniel Leussink and Tetsushi Kajimoto

TOKYO (Reuters) -Japanese Finance Minister Shunichi Suzuki on Friday refrained from commenting on the possibility of government intervention in the foreign exchange market to stem a weak yen, while maintaining his warning against any rapid fluctuations.

The latest jaw-boning came a day after the yen hit a fresh 20-year low against the dollar and a seven-year trough against the euro on expectations the Bank of Japan (BOJ) will continue to lag behind other major central banks in exiting stimulus policy.

The weak yen trend has boosted the prices of imported commodities and pushed up the cost of living for resource-deficient Japan.

“I won’t comment on currency levels, including the question (of intervention) to avoid causing any impact from an offhand comment,” Suzuki told reporters when asked about the possibility of intervention.

“What’s most important is currency stability as rapid fluctuations are not desirable,” Suzuki told a news conference, repeating the official line.

“We will continue to carefully watch currency market movements and their impact on Japan’s economy with a sense of urgency.”

The Japanese currency on Thursday weakened to as much as 134.56 yen per dollar.

Japanese currency authorities were likely left in a bind over the yen’s weakening, said Daisaku Ueno, chief forex strategist at Mitsubishi UFJ Morgan Stanley Securities.

“Verbal intervention is not working, while it has not reached a danger zone around 145 yen that I think warrants actual intervention,” Ueno said.

The yen has lost over 14% against the dollar so far this year. It last traded at about 134.05 yen per dollar.

Japan in theory could take unilateral action by intervening, while giving U.S. authorities advanced notice of such a move, Ueno said.

“But that would upset (U.S. Treasury Secretary Janet) Yellen who is a firm believer of market-determined exchange rates, particularly at a time when the U.S. is battling rising inflation,” he added.

However, despite repeating verbal warnings against the yen’s recent weakening, Japanese authorities remain in no mood to intervene in the exchange market, partly because a strong U.S. dollar suggests the currency’s slide is due to fundamental factors.

A government source with knowledge of the matter told Reuters on condition of anonymity that the velocity of the yen’s move would matter more than any particular levels in judging the need for intervention.

Suzuki on Friday said Japan’s government would respond appropriately based on the Group of Seven agreement on foreign exchange.

There is no clear consensus among analysts on the trigger point for currency intervention.

Some investors had previously seen 125 yen to the dollar as a trigger for action in the foreign exchange market – the level known as the “Kuroda line” after BOJ Governor Haruhiko Kuroda signalled caution when the yen last reached that mark in 2015.

(Reporting by Daniel Leussink and Tetsushi Kajimoto; Editing by Chang-Ran Kim & Shri Navaratnam)

source

(Reuters) -Some major Russian banks started charging fees for accounts in dollars and euros after authorities said they could consider imposing negative interest rates for foreign currency deposits, drawing the ire of customers.

Russia was considering imposing negative rates on deposits held in U.S. and European currencies to spur the use of other currencies, the central bank said last month, adding that the measure could target banks’ corporate, not retail clients.

But on Thursday Russian online bank Tinkoff announced a 1% monthly charge for some forex accounts after its peer, the Russian unit of Raifeissen Bank International’s, promised negative interest rates on some foreign currency holdings from June 30.

Tinkoff, which has offered exchange rate incentives to encourage Russians to move FX holdings to roubles, said the 1% service fee would be deducted monthly on accounts in dollars, euros, pounds and Swiss francs with a balance of over $1,000, starting from June 23.

Raiffeisen said on Thursday it would increase fees for foreign currency transfers, while Rosbank, which Societe Generale sold to a firm linked to Russian oligarch Vladimir Potanin in May, said it was considering commission on dollar and euro accounts by the end of June.

After the bank’s statement, customers of Tinkoff, owned by TCS Group Holding, complained of empty ATMs on a chat forum.

“Then let us take out money, what are you monsters up to!” one user wrote soon after the bank said it would be introducing the fee.

Tinkoff support responded to a Reuters reporter saying they top up their ATMs regularly but could not say definitively when cash would be added to those that had emptied.

Uralsib Bank, one of Russia’s top 25 lenders, has also introduced commission on euro-denominated accounts.

‘FORCED MEASURE’

With their already limited cash holdings of hard currency, Russian banks have few options for investing foreign currencies because of capital controls in Russia and the risk of funds abroad being frozen as a result of Western sanctions.

State Duma representative Yevgeny Fedorov told a Moscow radio station that the General Prosecutor should look into Tinkoff’s move, saying the bank had no right to impose a fee on existing accounts without warning customers.

“According to Russian law … If you have ownership of your funds, then no one has the right to take that ownership away from you,” he said. “When people made the deposit, they did not expect the bank would start taking funds away from them.”

Tinkoff said financial institutions were limited in being able to securely hold foreign currency “in the current geopolitical situation” and said an insignificant number of customers held amounts exceeding $1,000.

“This is a forced measure. It is due to the unreliability of foreign partners in terms of foreign currency operations for Russia and is aimed at reducing Tinkoff Bank’s foreign currency positions,” the bank said in a statement.

“In the near future, we will be offering accounts in alternative currencies.”

Tinkoff said it would only be possible to open savings accounts in roubles from June 23 but that it would waive the commission for transfers over the SWIFT global payments system until June 30.

A similar measure would soon be adopted for foreign currency held in brokerage accounts, Tinkoff said.

(Reporting by Reuters; Editing by Alison Williams)

source

By Marwa Rashad

LONDON (Reuters – An at least three-week shutdown at Freeport LNG, operator of one of the largest U.S. export plants producing liquefied natural gas (LNG), is expected to delay cargoes to Europe, further stressing the continent’s drive to phase out Russian gas.

The outage at the plant, which provides around 20% of U.S. LNG processing capacity, began with an explosion at its Texas Gulf Coast facility on Wednesday. It has triggered alarm bells among players in market already struggling with reduced Russian supplies and resurgent demand in Asia.

The plant historically sent most of its cargoes to Japan and Korea, but the outage will affect Europe, which has been pulling U.S. cargoes from the east because of the higher prices. Russia’s invasion of Ukraine – actions that Moscow calls a “special military operation” – shifted flows to Europe from Asia.

A three-week shutdown will mean the loss of around 13-15 cargoes, although Europe should be able to make up its losses from gas storage. But the risk remains if the shutdown extends for a longer period, said analysts.

“An outage for three weeks minimum is a loss of around 940,000 tonnes of LNG. If you took an average cargo size around 70,000 tonnes, that’s about 13 cargoes,” said Alex Froley, LNG analyst at data intelligence firm ICIS.

The outage coincides with Nord Stream 1 maintenance and some Norwegian gas maintenance measures; however the market might be able to deal with it by withdrawing some volumes from storage potentially, said a person familiar with the market.

“If the outage lasts months rather than weeks, the total loss can be much greater, and Europe’s more comfortable inventory situation will not be quite as reassuring. We would then expect the strong European LNG price premium over Asia to return,” said Tamir Druz, managing director at Capra Energy.

The news has initially sent U.S. natural gas futures down as much as 14% as traders anticipated the outage would free up supplies and help rebuild U.S. storage for winter demand.

However, prices recovered later on Thursday and were up about 2% as the market focused more on high air conditioning demand from a heatwave blanketing parts of the United States, especially Texas. [NGA/]

In Europe, gas prices rose by up to a fifth on Thursday morning on fears lost U.S. shipments would stress a market already struggling with reduced Russian supplies. Prices cooled off at the market close. [NG/EU]

Japan-Korea-Marker (JKM) prices – which are widely used as a benchmark for Asian LNG – also rose, with The Platts JKM LNG assessed at $23.486 per metric million British thermal units (mmBtu) on Thursday, an increase of $1.694, or 7.8%, from the previous day.

FREEPORT’S BUYERS

BP, TotalEnergies, Osaka Gas, Japan’s biggest power generator JERA and South Korea’s SK Gas Trading are listed as the buyers of Freeport LNG cargoes, industry sources said. BP has the largest contract at 4.4 million tonnes per annum through 2040.

Japan typically imports 6-7% of its total LNG supply from the United States during June, with LNG from Freeport accounting for at least half of the volume, said Kpler gas and LNG analyst Ryhana Rasidi.

South Korea has imported an average of about 20% of its LNG from the United States in June over the last two years. It could potentially lose at least 0.13 million tonnes of LNG, about 17% of its consumption, from the facility, she said.

In March, 21 cargoes loaded at the Freeport facility, carrying an estimated 64 billion cubic feet of gas to destinations in Europe, South Korea and China, according to the U.S. Department of Energy. That was up from 15 cargoes in February and 19 in January.

Around 70% of Freeport’s monthly supplies in the past few months went to the European Union and Britain. France, Britain, Turkey and the Netherlands have been the biggest European importers from Freeport LNG this year, industry sources said.

“Of 14 Freeport cargoes arriving at destinations in May, 10 of them went to Europe, two to Asia and two to the Americas.” Froley said. (Graphic: Freeport exports by destination – https://graphics.reuters.com/UKRAINE-CRISIS/FREEPORT-EUROPE%20UKRAINE-CRISIS/akvezrkdypr/FREEPORT%20EXPORTS%20BY%20DESTINATION%20(AIS)%20-%20Refinitiv%20Eikon.png)

(Reporting by Marwa Rashad in London, additional reporting by Nora Buli in Oslo, Gary McWilliams in Houston and Scott DiSavino in New York; Editing by Marguerita Choy and David Evans)

source

By Devik Jain and Mehnaz Yasmin

(Reuters) – Wall Street’s main indexes fell in choppy trading on Thursday, as growth and bank stocks slipped amid weaker risk appetite ahead of a closely watched inflation report this week.

Nine of the 11 major S&P sectors traded lower, with energy, financials and materials down 1% each. Consumer staples and consumer discretionary sectors edged higher.

Apple Inc and Amazon.com declined 1%, dragging the S&P 500 and the Nasdaq indexes lower. Bank of America tumbled 2.5%, while the broader banks index shed 1.7%.

Rate-sensitive growth stocks are under pressure as the benchmark U.S. 10-year Treasury yield climbed to as much as 3.07%, its highest level since May 11.

Inflation worries came to the fore ahead of the U.S. consumer price index (CPI) report on Friday as Brent crude prices rose above $123 a barrel.

“There is a straight line read from higher prices at the pump for the U.S. consumer to higher U.S. inflation,” said Huw Roberts, head of analytics at Quant Insight.

“The hope was that Friday’s CPI report would be ammunition for the peak inflation argument and the crude oil move is upsetting that.”

Consumer prices are expected to have risen 0.7% in May, while the core consumer price index, which excludes the volatile food and energy sectors, rose 0.5% in the month.

Investors fear a hot reading on inflation could keep the U.S. Federal Reserve on its path to raise interest rates aggressively against the backdrop of a volatile stock market, strong consumer spending and tight labor conditions.

The U.S. central bank has raised its short-term interest rate by three-quarters of a percentage point this year and intends to keep at it with 50 basis points increases at its meeting next week and again in July.

“Right now, we are at the confluence of four headwinds – a slowdown in economic growth rate in the United States, Fed tightening monetary policy, a rise in interest rates and a red hot inflation,” said David Sekera, chief U.S. market strategist, at Morningstar.

At 12:11 p.m. ET, the Dow Jones Industrial Average was down 172.65 points, or 0.52%, at 32,738.25, the S&P 500 was down 26.40 points, or 0.64%, at 4,089.37, and the Nasdaq Composite was down 90.96 points, or 0.75%, at 11,995.31.

Alibaba Group slid 7.9% after its affiliate Ant Group said it has no plan to initiate an initial public offering.

Tesla Inc rose 2.2% as the electric automaker sold 32,165 China-made vehicles last month, up sharply from 1,152 in April. Brokerage UBS upgraded the stock to “buy” and raised its profit estimates for the next three years.

NXP Semiconductors jumped 6.1% on report Samsung Electronics plans to acquire the Dutch chipmaker.

Declining issues outnumbered advancers for a 3.82-to-1 ratio on the NYSE and for a 2.51-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week highs and 30 new lows, while the Nasdaq recorded 13 new highs and 82 new lows.

(Reporting by Devik Jain and Mehnaz Yasmin in Bengaluru and Chuck Mikolajczak in New York; Editing by Arun Koyyur and Sriraj Kalluvila)

source

By Byron Kaye and Harish Sridharan

(Reuters) -Australian gambling regulators have cleared private equity giant Blackstone Inc to run the troubled casinos of Crown Resorts Ltd in the country’s two largest cities, a crucial but largely expected step in its $6.3 billion buyout.

The Sydney-listed target that is 37% owned by billionaire James Packer has been under pressure for years since damaging inquiries found it enabled money laundering, while COVID-19 lockdowns and border closures battered its profit and shares.

Crown has since backed Blackstone’s buyout offer as a way for investors to exit what has become a volatile investment, while analysts have said the sheen of new ownership might speed up efforts to show regulators it has overhauled its governance.

The new approvals, though widely expected, remove concern of the buyout facing more regulatory headaches in Crown’s two main markets. Already Crown’s A$2.2 billion ($1.58 billion) Sydney casino has been banned from taking bets since opening in 2020, while its Melbourne resort is under government supervision.

Regulators in Perth where Crown operates its third casino, which is also under state supervision, have not made a decision about Blackstone.

In a statement, Crown said only that Blackstone received two regulator approvals and was awaiting a third. Blackstone declined to comment.

Crown’s share price rose nearly 2% to A$12.99 in Thursday morning trade, against a 1% decline in the broader market. It is hovering just below Blackstone’s A$13.10 offer, signalling growing expectation of the buyout going ahead.

“These approvals are a key step … to ensure Crown Sydney is able to fully meet its undertakings for major operational, governance and structural reforms,” said Philip Crawford, chair of the New South Wales Independent Liquor & Gaming Authority, which has suspended Crown’s Sydney gambling licence.

“Blackstone has been required to demonstrate the highest standards of probity,” he said in a statement.

“This commitment is vital to ensure Crown Sydney is free from criminal influence and properly manages the risks of harm associated with casino activities,” Crawford said.

The Victorian Gambling and Casino Control Commission, which oversees the Melbourne casino, said in a statement its approval included the condition that a privately owned Crown continued to follow stock exchange governance rules.

Crown shareholders have endorsed the takeover but the deal must be approved by the federal court, which will not set a hearing date until Perth’s regulator greenlights Blackstone.

($1 = 1.3949 Australian dollars)

(Reporting by Byron Kaye in Sydney and Harish Sridharan in Bengaluru; Editing by Sherry Jacob-Phillips and Christopher Cushing)

source

(Reuters) – Deloitte, one of the “Big Four” accounting firms, said late on Wednesday that media reports about the company exploring a plan to split its global audit and consulting practices are “categorically untrue”.

The news of the split, reported https://www.wsj.com/articles/deloitte-exploring-splitting-auditing-consulting-arms-following-ernst-young-11654709024?mod=hp_lead_pos3 by the Wall Street Journal earlier in the day, came in a few weeks after another Big Four accounting firm Ernst & Young said it was evaluating strategic options to improve audit quality.

“As stated previously, we remain committed to our current business model,” a company spokesperson said in an email to Reuters.

According to the WSJ report, Deloitte reached out to investment bankers at Goldman Sachs Group Inc and talks are still at a very early stage. Goldman and JPMorgan Chase & Co are advising Ernst & Young on its possible restructuring, the report added, citing people familiar with the matter.

For years, the four accounting giants have been under the regulatory scanner over worries that their advisory service offerings could impair audit quality and potentially create conflicts of interest.

The other “Big Four” accounting firms PricewaterhouseCoopers and KPMG did not immediately respond to Reuters’ request for a comment after business hours.

(Reporting by Niket Nishant and Maria Ponnezhath in Bengaluru; Editing by Devika Syamnath and Sherry Jacob-Phillips)

source

By Andrew Galbraith

SHANGHAI (Reuters) – Asian stocks fell, U.S. bond yields rose and a soaring dollar pushed to a two-decade high against the yen on Thursday as investors worried about the outlook for more rate rises ahead of a key meeting of the European Central Bank later in the day.

But before the meeting, at which the ECB is set to bring to an end its Asset Purchase Programme and signal rate hikes to combat rising inflation, moves in the Asian session were relatively muted as many investors kept to the sidelines.

“It’s classic pre-central-bank-meeting price action. To speculate now on anything other than an hourly timeframe, or an intraday timeframe, doesn’t make a whole lot of sense at the moment,” said Matt Simpson, senior market analyst at City Index in Sydney.

“It’s the most exciting meeting since (Christine Lagarde) has been at the helm, since Draghi was here – ‘whatever it takes’.”

Adding to concern over European inflation, data showed the euro zone economy grew much faster in the first quarter than the previous three months, despite the war in Ukraine.

As investors guess at the size and pace of ECB tightening, they are also awaiting U.S. consumer price data on Friday that the White House has said it expects to be “elevated”. Economists expect annual inflation to be 8.3%, according to a Reuters poll.

While Asian share markets have risen around 8% from nearly two-year lows touched last month, investors remain worried that central bank policy tightening to control inflation could spark an economic slowdown.

In morning trade, MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.39%, tracking losses in U.S. stocks in the previous session.

Australian shares were down 1.19% and Seoul’s KOSPI slipped 0.64%, though Hong Kong’s Hang Seng eked out a gain of less than 0.2% and Chinese A-shares were flat.

In Japan, the Nikkei stock index was also unchanged.

Overnight, the Dow Jones Industrial Average fell 0.81%, the S&P 500 lost 1.08% and the Nasdaq Composite dropped 0.73%.

“Over the last two weeks, trading has been in a very narrow range and also based on very low volumes,” analysts at ING said in a note.

“Previous instances of this range trading on low volumes have usually preceded a sharp down-shift,” they cautioned, adding that the ECB meeting and Friday’s U.S. price data were likely “catalysts for a more bearish outlook.”

The wait for U.S. price data also weighed on U.S. Treasuries, which saw yields rise following a weak auction of 10-year notes on Wednesday.

The U.S. 10-year yield edged up on Thursday to 3.0548% from a U.S. close of 3.029% on Wednesday and the two-year yield, climbed to 2.8027% compared with a U.S. close of 2.774%.

Rising yields supported the dollar, particularly against the yen, which dropped to a 20-year low of 134.56. The Japanese currency has been weighed down by a widening policy divergence, with the Bank of Japan remaining one of the few global central banks to maintain a dovish stance. [FRX/]

The global dollar index was slightly higher at 102.6, and the euro was flat ahead of the ECB meeting at $1.0712.

Crude oil prices extended gains, rising to their highest levels in three months on hopes for strong U.S. demand and a recovery in China as COVID-19 curbs are eased.

Global benchmark Brent crude was last at $123.83 per barrel, up 0.2% on the day. U.S. crude added 0.17% to $122.32.

Gold, sensitive to rate hikes but seen as an inflation edge, was weaker. Spot gold lost 0.1% to %1,851.35 per ounce. [GOL/]

(Reporting by Andrew Galbraith; Editing by Sam Holmes)

source